CANADA FX DEBT-C$ closes slightly higher, briefly traded weaker than C$1.4000

(Adds analyst quotes, details; updates prices)
    * Canadian dollar at C$1.3945, or 71.71 U.S. cents
    * Bond prices higher across the maturity curve

    By Fergal Smith
    TORONTO, Dec 18 (Reuters) - The Canadian dollar managed a
modest bounce against its U.S. counterpart after
softer-than-expected domestic data had helped send the currency
to a more than 11-year low, although the recovery was cut short
by further weakening in oil prices.
    The loonie, as Canada's currency is colloquially known,
traded weaker than C$1.4000 against the U.S. dollar for the
first time since May 2004.
    But the move provided a signal for "profit taking,"
according to Adam Button, currency analyst at ForexLive.
    For the week, the Canadian dollar fell 1.5 percent, with
losses deepening after the U.S. Federal Reserve hiked rates on
    The Bank of Canada will not be concerned by the
softer-than-expected inflation data, but won't be able to look
past the "collapse in commodities," Button said.
    "Oil is in a complete tailspin, he added, "and the Canadian
dollar is right with it every step of the way."
    The Canadian dollar ended the week at C$1.3945 to
the greenback, or 71.71 U.S. cents, slightly stronger than the
Bank of Canada's official close on Thursday of C$1.3950, or
71.68 U.S. cents.
    The currency's strongest level of the session was C$1.3855,
while its weakest level was C$1.4003.
    Canada's annual inflation rate rose to 1.4 percent, a touch
shy of economists' forecasts for a rise to 1.5 percent. Closely
watched core inflation, which strips out volatile items, dipped
to 2.0 percent, which was also short of expectations.
    Wholesale trade dropped by 0.6 percent in October from
September, the fourth consecutive monthly decline, and far short
of analysts' average forecast for a 0.1 percent gain.
    U.S. crude prices settled at $34.73 a barrel, down
0.63 percent, while Brent crude lost 1.08 percent to
    Canadian government bond prices were higher across the
maturity curve, with the two-year price up 3.5
Canadian cents to yield 0.504 percent and the benchmark 10-year
 rising 29 Canadian cents to yield 1.398 percent.
    The Canada-U.S. two-year bond spread narrowed by slightly
less than 3 basis points to -45.5 basis points, while the
10-year spread was 0.6 of a basis point narrower at -79.9 basis
points, trimming recent outperformance for Canadian government

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn and Leslie